Hacker News Reader

Comment by drabiega | Hacker News Reader

Where then, would you draw the line between a currency and a non-currency asset?

When it hits all of:

    Acceptability
    Durability
    Divisibility
    Stability
    Portability
    (Elasticity)

If you can't spend it easily, it's not a (functioning) currency.

If it spoils or decays within your lifetime it's not a currency.

If it's not something you can divide in order to make payments of a more-or-less arbitrary amount, it's not a currency.

If you can't predict how much of the asset you will need to pay your bills next month, it's not a currency

If you can't bring it with you to the place where the exchange takes place, it's not a currency.

If you can't obtain capital investment in a currency because the currency itself is more valuable than anything you could produce, then it's not a (good long term) currency. This last one is in parens because it one only matters in a growing economy. A deflationary currency can still otherwise function as a viable medium of exchange, but eventually, lack of availability for new entrants will mean that entrepreneurs will begin looking to do business in alternate currencies.

Are you missing fungibility or is that covered?

Missed it. In my mind I think I lumped it in with divisibility, which is related but not quite the same thing.

Nice. In that case, I wonder if you've ever heard of Monero? :)

> If you can't predict how much of the asset you will need to pay your bills next month, it's not a currency

Back in the hyperinflation days, we couldn't predict how many Cr$ we would need to pay our bills in the next month. That didn't keep it from being a currency.

That period did not last. Yes, if you try hard enough and look narrowly enough you can find exceptions to any of these rules, but it holds as a general guideline. If hyperinflation had continued indefinitely, it's probable some other commodity would have supplanted it as a de facto currency.

Liquidity, probably - how fast can you exchange how much of it.

Though I do personally think there's a lot more to a currency than that.

Everything is a currency, if you barter hard enough.

Barter is, by definition, an exchange of goods without using money. In other words if you have to barter to get rid of it, it's not currency.

Reply on news.ycombinator.com